According to a PropTech entrepreneur and letting agent based in Sheffield, traditional tenant referencing is obsolete, as it uses slow and old systems, does not have adequate technology support as well as being extremely overpriced. Director of Vouch and SheffLets, Simon Tillyer, explains that consumers using traditional referencing methods and suppliers are paying far too much for this costly and outdated service. However, conducting tenant referencing thoroughly is one of the most crucial processes a letting agent or landlord undertakes when choosing to rent a property to a tenant, as it helps mitigate the risk of damage to the property and loss of income.

Mr Tillyer also pointed out the fact that some suppliers of traditional referencing systems are owned by big insurance firms which, he claims, are using referencing as an easy way to generate leads for selling insurance products. He also believes that old-fashioned referencing companies use a tick-box method which is outdated and unable to cater to the changing trends in employment and the economy. This means that freelancers, temporary and contract workers, which are included in the growing trend of UK workers and are part of the economy, are not considered.

Recent statistics provided by The Office of National Statistics has shown that the number of self-employed workers in the UK has risen from 3.3 million in 2001, to around 4.8 million in 2017.

Mr Tillyer also commented that with paper-based, traditional referencing, many potential tenants have not passed the outdated checks. Many of the providers of these referencing checks are slow to embrace emerging technology and are resistant to change, while also not currently possessing the technology to provide for Right to Rent. As a letting agent, Simon Tillyer explains that these systems fail to work in other sectors and industries, and as there is a lack of common sense in the approach, referencing fails both agents and landlords. He goes on further to add that, in his opinion, these products are not fit for their purpose.

Letting agents pay at least £25 for each tenant reference, which is an overpriced sum when compared with technology-driven reference checks. The only reasons that tenant referencing has remained at this large fee is because the companies can get away with charging this amount.

Agents have previously been able to supplement the cost of referencing using tenant fees, however, this is about to change. With the Tenants Fee Bill set to be introduced next year, agents cannot rely on money coming in to cover the costs of referencing, therefore they will not be able to pay these bills any longer.

However, Mr Tillyer believes that Vouch and other technology such as leading-edge tenancy referencing apps, will revolutionise the process and provide agents with a web-based, fully automated system which delivers significant cost savings. This time-saving, comprehensive solution provides a full reference at £5 per tenant. The applicant and technology perform the necessary tasks while the agent simply monitors the progress.

These systems build efficiency within the tenant application process, as well as improving the profitability and productivity of businesses.

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